Despite a volatile foreign exchange and lower GDP growth, Mexico-based hotel operator Posadas has improved its operating performance, cash flow generation, and liquidity beyond our expectations, reaching EBITDA margins near 25% and debt to EBITDA slightly below 4x. We're raising our corporate credit and debt ratings on Posadas to 'B+' from 'B'. The recovery rating on its existing notes remains at '3' in the lower half of the range. The positive outlook reflects our view that Posadas will continue improving its operating performance, liquidity, and cash flow generation in the next 12 months. We expect the company will continue benefiting from Mexico's solid tourism dynamics and industry growth prospects, while its liability management continues mitigating its exposure to foreign currency
